Rating Change #3
Lowe's Companies Inc (LOW) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, attractive valuation levels, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- LOW's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- LOWE'S COMPANIES INC has improved earnings per share by 10.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, LOWE'S COMPANIES INC increased its bottom line by earning $1.42 versus $1.20 in the prior year. This year, the market expects an improvement in earnings ($1.59 versus $1.42).
- Net operating cash flow has significantly increased by 1791.30% to $870.00 million when compared to the same quarter last year. In addition, LOWE'S COMPANIES INC has also vastly surpassed the industry average cash flow growth rate of 42.44%.
- In its most recent trading session, LOW has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
Lowe's Companies, Inc., together with its subsidiaries, operates as a home improvement retailer. The company offers a range of products for maintenance, repair, remodeling, home decorating, and property maintenance. The company has a P/E ratio of 14.6, above the average retail industry P/E ratio of 14.5 and below the S&P 500 P/E ratio of 17.7. Lowe's Companies has a market cap of $27.1 billion and is part of the services sector and retail industry. Shares are down 12.7% year to date as of the close of trading on Friday.You can view the full Lowe's Companies Ratings Report or get investment ideas from our investment research center.
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